3 Questions To Ask Before You File Chapter 7 Bankruptcy

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Bankruptcy is a complicated process, and this is why you should never try to do this alone. You need a lawyer, and your lawyer will help you find out if this is a good option for your situation. To do this, the lawyer is likely to discuss the following three questions with you.

Will It Eliminate Your Debts?

One of the first things a bankruptcy attorney will do is determine if you meet the income requirements to file Chapter 7. If you do, the attorney will then discuss your debts with you. The main goal of Chapter 7 is to get rid of debts without repaying them, and this can happen through a discharge. It's important to note that there are certain debts that cannot be discharged, and your lawyer will be able to tell you which ones can and cannot just by looking at the debts you have. For example, credit card debts can almost always be discharged, while child support arrearage cannot.

Will You Lose Your Assets?

The next thing the attorney will talk to you about is the assets you own. He or she will need to know exactly what types of valuable assets you have, including your house, cars, recreational vehicles, collections, and cash. In addition to telling the attorney what assets you own, you will also need to tell him or her how much you owe on them. If you own them outright, there is a greater chance you will have to surrender them in bankruptcy. On the other hand, there is a greater chance you will be able to keep them if you have very little equity in them.

How Much Will This Cost?

The third thing you should discuss with the lawyer is the fees you must pay, and you shouldn't be surprised if you find out that all the fees must be paid in full before you file. This is a standard requirement, and you will have to abide by it. Some attorneys offer payment plans, but you will still not be able to file until the balance is paid in full. As you are paying it off, the attorney could be working on your paperwork so it is ready to file as soon as you make your last payment.

On average, the cost of filing for Chapter 7 is between $1,080 to $1,200, and this includes the filing fees and the attorney fees.

If you are interested in finding out how Chapter 7 could help your financial situation, schedule an appointment today with a local bankruptcy attorney, such as Jeffrey S. Arnold, Attorney at Law, P.C.